Stocks to watch: AIA, DPC, FBU, IFT, NPX, WTL

Thursday 10th June 2010

Interest rate sensitive stocks will be watched today after the Reserve Bank increased the official cash rate this morning. Also there is a more positive tone to the market after the NZX reecovered ground yesterday, had some good news from companies like Auckland Airport and Nuplex. Added to the the US economy is reported to be on a sound footing.

Themes of the day: Reserve Bank Governor Alan Bollard lifted the official cash rate by 25 basis points to 2.75%, the first increase in three years, saying the economy’s recovery is becoming broader based and inflation pressures are set to increase. The kiwi dollar rose to 67 US cents from 66.69 cents immediately before the statement. US Federal Reserve chairman Ben Bernanke said the American economy was on a sound footing and that the central bank remained prepared to assist the recovery, and equities rose overnight. In late trading, the Dow Jones rose 0.10%. Chinese exports grew about 50% from a year earlier according to a Reuters report, far exceeding expectations. The traded figures are due for release today.

Auckland International Airport (NZX: AIA ): The international gateway announced that low-cost carrier Jetstar will begin a daily return flight from Singapore next March. The Airbus A330-200 aircraft will provide an additional 220,000 seats into the airport and connect to the rapidly expanding Asian markets said chief executive Simon Moutter. The announcement comes a year after Jetstar, a Qantas subsidiary, begun domestic flights in New Zealand. Moutter said the new Jetstar Singapore flights will support major New Zealand tourism initiatives including the 2011 Rugby World Cup. AIA’s shares gained three cents yesterday to $1.86.

Dorchester Pacific (NZX: DPC ): The company said yesterday that its $10 million capital raising will be substantially underwritten by the two major shareholders, Business Bakery and Hugh Green Investments, which each currently hold just under 20% of the shares. Chairman Barry Graham is to step down and be replaced by Grant Baker. The shares were last at 15 cents.

Fletcher Building (NZX: FBU ): The international building supplier and constructor may find its domestic housing market segment tightens up after Reserve Bank governor Alan Bollard announced a hike in the OCR. The sole New Zealand manufacturer of gypsum plasterboard recently said the residential construction side of its business is slowly improving on both sides of the Tasman Sea. Its shares fell 1 cent yesterday to $8.03.

Infratil (NZX: IFT ): Shareholders of the investment group that owns airports, energy assets and a bus company yesterday approved a new constitution that will allow it to dual list on the ASX. The shares fell 0.6% to $1.59 yesterday.

Nuplex (NZX: NPX ): The specialty chemicals maker, gained about 4% to $2.88 yesterday, leading the benchmark index higher after saying earnings before interest, tax, depreciation and amortization may rise to $125 million to $135 million this year, from $91.5 million last year, helped by improved margins and increased demand.

Windflow Technology (NZX: WTL ): The wind turbine manufacturer said yesterday it is considering raising capital to build the 12.5 Megawatt Long Gully windfarm behind Wellington after its 20% shareholder, MightyRiverPower, pulled out of the construction deal. The shares last traded at 90 cents.

Businesswire.co.nz

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